The latest findings from the Recruitment & Employment Confederation (REC) JobsOutlook survey reveal that employers are increasingly optimistic about their own business prospects, signalling positive growth sentiments amidst a challenging economic landscape.
During the period of April-June 2023, employers’ confidence in making hiring and investment decisions for their own businesses showed a notable uptick.
A net balance of +7 indicated that more businesses were growing in belief about their future prospects than those expressing doubt. This positive shift represents the first time since early 2022 that the measure has moved into the positive territory, suggesting a renewed sense of optimism within the business community.
Notably, businesses’ perceptions of the wider economy also improved, although they remained negative overall, with a balance of -41 recorded during the same period (April-June 2023).
Interestingly, a higher-than-usual number of businesses responded with “don’t know” when queried about their hiring plans, potentially reflecting uncertainty stemming from the contrast between firms’ positive outlook for their own prospects and their cautious view of the broader economic landscape.
Why is hiring caution so prevalent?
The prevailing headwinds of inflation, interest rates, and slow growth are contributing to employer caution when it comes to forecasting demand for staff. According to the JobsOutlook report, demand for permanent workers in the next three months remained unchanged at +18, while demand for temporary workers stood at +8. In the medium-term (four to 12 months), forecast demand for permanent workers declined from +20 (during February-April 2023) to +16, and for temporary workers, it registered in negative territory at -8.6.
This contrast between growing confidence in their own businesses and cautiousness in hiring decisions highlights the unpredictability of the wider economic scenario.
Economic challenges
Neil Carberry, Chief Executive of the REC, shared his insights on the survey results, stating, “Businesses across the country are clear that they believe in their business and its plans – and they are continuing to hire. But concerns about the wider economic picture are slowing some decisions or reducing them in scale.” He emphasised the importance of a clear growth plan from the government, which would bolster businesses’ willingness to invest in their own growth despite concerns about the overall economic climate.
Carberry stressed that an effective industrial strategy focused on enhancing competitiveness, encouraging investment, and promoting employment should include critical issues like childcare, transport, immigration, and welfare-to-work support, as these factors significantly impact labor supply and growth potential.
The JobsOutlook survey is produced by the REC in partnership with Savanta ComRes. Data was collected through telephone interviews with 501 UK employers involved in hiring between 4th April and 26th June 2023. The data was weighted to represent UK adults in employment by region, industry sector, and public/private split. Savanta ComRes is a member of the British Polling Council and adheres to its regulations.
As the business landscape evolves amid economic challenges, it remains crucial for businesses and policymakers to closely monitor employer sentiment and collaborate to foster an environment that supports growth and stability.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
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